Why, exactly, is Africa a relatively poor continent, and what are the policies that can accelerate its growth? Thus Joe Studwell narrowed down the question that he says Microsoft co-founder Bill Gates invited him to pursue to follow up his earlier How Asia Works: “can Africa – like Asia – defeat poverty, become prosperous, raise its self-confidence and play a stronger cultural role in the world?”
Following that book with a doctorate from the University of Cambridge, Studwell has earned an impressive record. In How Africa Works he examines four African countries in some detail – Botswana, Mauritius, Ethiopia and Rwanda – while scrutinising other countries’ attempts at development and analysing the success and failures of the differing approaches.
Demographic disposition
Studwell’s analysis is underpinned by an observation regarding the continent’s demographic disposition. Africa is adding 300m people per decade to its population of 1.5bn. Consequently, by the end of this century Asia and Africa will each account for 4bn people in a global population of 10bn people.
Does this mean we are facing a Malthusian nightmare, in which population growth necessarily outstrips food production? Not necessarily, Studwell argues: “populations in many of the world’s countries are already falling and global population will peak before the end of this century. Instead, there will be a move to a demographic distribution that lays to rest the anomaly that still prevailed in 1950, when Asia’s population was more than six times Africa’s despite being only one and a half times larger in size.”
What demographics do mean, however, is that every successful development strategy begins with a focus on agriculture. But How Africa Works notes a troubling trend: increasing numbers of African youth are deserting rural areas to resettle in the continent’s burgeoning urban centres.
As he writes: “The great engines of demand in contemporary Africa are its evolving towns and cities. The continent is experiencing the fastest rate of urbanisation that the world has seen.” In some countries, “such as Mauritania or Mozambique, the rate of urbanisation was as high as 9% a year”. This clearly has an impact on agricultural activity.
A looming challenge
A pressing problem confronting Africa’s agricultural sector is of course climate change. “Across the continent,” Studwell writes, “scientists’ most confident prediction is that a high level of global warming – three or four degrees centigrade, at the upper end of present forecasts – will be particularly bad for Africa, shrinking
the areas in which crops like cereals can be grown…”
Studwell profiles four countries that he describes as “early movers” which, in part, provide lessons for the rest of the continent.
An island paradise
Mauritius managed to woo investment from South Africa to develop a high-end tourism business, despite the absence of diplomatic relations because of apartheid. The ruling Mauritius Labour Party, facing acute youth unemployment looked to stimulate export-oriented manufacturing and an export processing zone (EPZ). Studwell observes that the growth of the EPZ was “also pushed along by a sudden abundance of Mauritian capital,” primarily due to a “twenty-fold price increase” for sugar on the world market between 1966 and 1974.
Mauritius became the third biggest exporter of woollen knitwear as well as by 1990 boasting the highest share of EPZ workers in the world. Not only did the mid- and high-end tourism sector flourish, but tuna processing and canning and the financial services industries added to Mauritius’ economic growth.
Ethiopia’s ambition is a similar growth trajectory. In 1991 Ethiopia emerged from a 17-year civil war that “cost the lives of half a million people”. Economically, the country was on its knees. “But unlike governments that came to power in other African states through war – from Zimbabwe to Uganda to Mozambique to Algeria – the victors in Ethiopia used non-combat periods of the conflict to hone a practical plan for economic development.”
Meles Zenawi led the Ethiopian People’s Revolutionary Democratic Front (EPRDF) to defeat the Stalinist regime of Mengistu Haile Mariam, and as the country’s PM oversaw the provision of fertiliser and better-quality seeds to the country’s 15.5m smallholder farmers.
The EPRDF’s focus on agriculture saw from 2004 on a 70% increase of cultivated land and a 5% annual average cereal crop yields increase – resulting in a doubling of production to 32m tonnes by 2014.
Alongside agriculture, the EPRDF had a relentless focus on poverty eradication. Studwell calls Ethiopia’s economic progress a “development miracle”.
Shadow of autocracy
Undoubtedly, Rwanda’s recovery from the horrific genocide of 1994 is impressive, but under its post-genocide leader Paul Kagame it is hainted by the shadow of autocracy.
Aid nevertheless continued to flow to Rwanda. The Rwandan government’s Vision 2000 economic plan, modelled on that of Kagame’s hero, Singapore’s Lee Kuan Yew, secured growth between 2000 and 2019 averaging 7.8% annually.
As Studwell observes, by offering services like banking, insurance and telecoms to central Africa’s hinterland, and by exploiting the resources of the conflict-ridden eastern DRC, Rwanda has “the opportunity to play a Singapore-like role in Africa”.
When it achieved independence Botswana, then called Bechuanaland, was surrounded by white settler colonies – today’s South Africa, Namibia and Zimbabwe. Studwell describes how the country was in thrall to large-scale cattle owners, especially after the nationalisation an abattoir that held a monopoly on beef exports.
But it was the finds by De Beers of diamonds at Orapa, where production began in 1971, providing 10% of government revenue. De Beers, which through its Central Selling Organization and then the Diamond Trading Company exerted a major influence on the global diamond market, found two more massive diamond-bearing kimberlite pipes at Ledhakane and Jwaneng.
Mining came to account for half of Botswana’s GDP, allowing the government in 1976 to drop its use of the South African Rand and launch its own currency, the Pula and embark on a rapid expansion of the education system, healthcare and road infrastructure.
But, as rosy as Botswana’s diamond-rich economy might appear, and how competent its government’s development drive, the country’s manufacturing policy has been, in Studwell’s view, “weak and poorly implemented”.
Enclave development
How Africa Works more generally addresses the problem of the “enclave effect” that invariably accompanies mineral and hydrocarbon investment. Such resource projects usually exist as standalone enterprises that fail to stimulate economic growth in other parts of a country’s economy beyond their ”enclave”.
This “not only brings little economic stimulation to economies, it actively undermines local entrepreneurs”. He goes on to write that “across 17 states in Africa with significant mineral extraction, there are at least 7m artisanal… miners” They are “estimated to produce 30% of African cobalt, 25% of its tin, tantalum and diamonds, 20% of its gold and 80% of its sapphires”.
He adds: “The bigger picture is that the expansion of legitimate, artisanal mining businesses is constantly challenged by international mining investors and their allies in African governments.” Studwell quotes research by Ben Radley showing that, at least in eastern DRC, successful artisanal miners reinvest in trading activities and productive local ventures such as agriculture, flour milling, brewing, real estate, ball mills for grinding gold-bearing ore, brick kilns, cement production and manufacturing consumer durables.
How Africa Works is packed with such details on the continent’s agriculture, its resource exploitation and its manufacturing and industrialisation journey.
It is in the continent’s population growth that, perhaps controversially, Studwell finds hope, writing that “Africa is only now becoming sufficiently densely populated to achieve strong economic growth,” and to follow the path he described in his earlier book on Asia.